Cinemark Holdings Inc (CNK)

Cinemark Holdings Inc's liquidity ratios have shown fluctuations over the past five years.

The current ratio, a measure of the company's ability to cover its short-term obligations with its current assets, has generally been in an acceptable range, with the exception of 2019 when it was relatively low at 0.90. A current ratio of 1.45 in 2023 indicates that the company had $1.45 in current assets for every $1 in current liabilities, showing an improvement in the liquidity position compared to the previous year.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown variability. The quick ratio of 1.42 in 2023 suggests that the company had sufficient liquid assets to cover its short-term liabilities.

The cash ratio, which is the most conservative liquidity measure, reflects Cinemark Holdings Inc's ability to settle its current liabilities using only cash and cash equivalents. The cash ratio has generally been increasing over the years, reaching 1.23 in 2023, indicating a stronger ability to meet short-term obligations with cash on hand.

Overall, the liquidity ratios of Cinemark Holdings Inc have shown improvement in 2023 compared to the previous year, indicating a better ability to meet its short-term financial obligations. However, continued monitoring of these ratios is recommended to ensure ongoing liquidity health.

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Additional liquidity measure

The cash conversion cycle (CCC) of Cinemark Holdings Inc has varied significantly over the past five years. In 2023, the company's CCC increased to 6.24 days from 4.64 days in 2022. This indicates that Cinemark took slightly longer to convert its investments in inventory into cash in 2023 compared to the previous year.

Interestingly, in 2021, Cinemark reported a negative CCC of -15.19 days, implying that the company was able to convert its inventory into cash at a much faster rate than its payables coming due. This negative CCC suggests efficient management of working capital and potentially effective inventory and receivables management strategies during that period.

In both 2020 and 2019, Cinemark had positive CCC figures, indicating a longer cash conversion cycle compared to 2021. In 2020, the CCC was 11.28 days, showing an increase from the -11.33 days in 2019.

Overall, Cinemark's CCC has shown fluctuations over the analyzed period, suggesting varying efficiencies in managing its working capital components such as inventory, accounts payable, and accounts receivable. Further examination of operational and financial strategies may provide insights into these fluctuations and enable the company to optimize its cash conversion cycle for improved financial performance.